Daily Report – Bitcoin and Market Update (January 29 2022)

HTF 12H:

The middaily chart displays very low volatility over the course of last hours, where the price action takes place within a narrow 500-1000 USD range. Let’s give it a deeper consideration for the potential scenarios ahead.

Firstly, BTCUSD is trading right above the BaseLine average, showing somewhat technical strength, yet it is lacking any greater strength. It seems to be simply oscillating around its average, so I would not necessarily put too much trust or focus on this. It is still more positive than not, though.

Secondly, bitcoin is currently supported by BWAP block (the orange box), which additionally is backing up the price action to the upside. The cluster of supports occurs at 36.3-37k USD region.

BPRO Momentum Bands suggest that standard deviation based volatility should cause bitcoin move between 31.3k USD and 43.3k USD levels for most of the time. Currently, bitcoin is trading right in the middle of the zone so there’s not much directional advantage of either way. As long as bitcoin remains over its average, the chances to retest the upper Band region are higher than they are for testing the lower Band region. Regular volatility suggests that 31.3-33.5k USD is a demand zone, while 41-43.3k USD is a supply zone.

CTF Trailer Stop at 40365 USD is the main resistance level, which with a proper daily/weekly close through it, should provide enough technical reasoning to confirm the reversal of this 2-month lasting correction.

MTF 4H:

MTF chart shows a tight range defined by local highs and lows of the candlestick series with BPRO pivot zones marked with thick orange and gray zones and levels.

Locally, it seems that the most important support level is defined at 35850 USD, while the main resistance is set at 43000 USD level. Bitcoin is trading at 37500 USD region at the moment of writing this review and as long as it trades above the said support level, there are high technical chances for heading towards 43000 USD, provided that no external news (wars, conflicts, catastrophes, etc.) interrupt.

The narrow range for the intraday price action spreads between 37150 USD lows and 38000 USD highs. A stronger breakout outside any of these levels implies the pattern unfold towards either 35850 USD or 39000 USD.

CTF Trailer (represented by the orange dot at the bottom) shows that the bulls currently have the upper hand as the trend mode is set for bullish, so as long as bitcoin saves the said support at 35850 USD, the technical target is 43000 USD.

LTF 1H:

The hourly chart continues inside the trading range of low volatility. After printing a local fake breakout through 38000 USD resistance, bitcoin is attempting to form the intraday base at 37400-37700 USD. It is also additionally backed by one of the Level Lines at 37657 USD.

HTF Trailer adjusted for the 4H time frame settings, implies that the main short-term level that bitcoin bulls need to defend is at 35970 USD. Like in the prior case, this level is additionally supported by a Level Line at 35943 USD.

The resistances defined by the price action of bitcoin are given as follows:

41100
39000
38200

BPRO Level Lines show supports at:

35943
34786
33136

These levels could be anticipated to serve as level-to-level references. In other words, when one level is breached, the next one in the direction of the movement can be expected to act as the next “magnet”

FEAR/GREED INDEX

Just a quick update on the sentiment side.

Extreme fear continues at 24 points on the scale with little to no change at all when compared with yesterday.

This overall market barometer implies that for the last two months straight crypto has become a “depressed ghost town” full of disbelievers.

Historically, because the market cycle mechanism, what goes down, eventually it should go back up sooner than later, as the market swings between oversold and overbought conditions. Provided that no external factors disrupt the markets again (wars, pandemics, catastrophes, etc.), I consider 33-37k USD range bound movement to be a basing pattern (including potential liquidity hunting right below the support or right above the resistance).

As the records suggest, those who keep shorting into the extreme fear soon are proved unprofitable and in loss, while those placing contrarian bets (buying the fear, selling the greed) are proved profitable.

Usually, the crowds are right in the middle of trends and wrong at the extremes. The fear is in the extreme now.

No matter how much longer it takes (days or weeks), I expect no different this time. Though, it certainly does not justify ignoring risk management rules, portfolio diversification, money management (position sizing), etc.

Hope this report helps you out!

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